The Anambra State Board of Internal Revenue has sued the Attorney of the Federation and Minister of Justice; the Minister of Finance and the Executive Chairman, Federal Inland Revenue Service; before a Federal High Court in Awka, the Anambra State capital, over the provision of Section 27 of the Finance Act, 2021.
The Act amended Section 89A of the Stamp Duties Act and subscribed to the Minister of Finance, enlarged powers to regulate, subject to the approval of the National Assembly, the imposition, administration, auditing, accounting, collection, and remittance of Stamp Duties on electronic receipts in respect of instruments initiated and executed or transaction initiated and carried out between persons or individuals, which by Law, is accruable to the different States of the Federation, pursuant to Section 4 (2) of the Stamp Duties Act, 2004, as amended.
The plaintiff’s counsel, David C. Onyilofor, brought the application in an originating summons. A copy of the suit with reference No. FHC/AWK/CS/03/2022, which was supported by an affidavit by the plaintiff’s Consultant, Francis Uzoma Ubani, was made available to journalists on Friday.
The case has been assigned to Justice H.A. Nganjiwa.
The plaintiff prayed the court to determine if the above provision is not in conflict with the provisions of Sections 3(3), 111, 115, and 116(2) of the Stamp Duties Act, 2004, as amended; and whether it is not inconsistent with the provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, and therefore is null, void and of no effect whatsoever, to the extent of the inconsistency.
It also sought the relief of the court for an order directing the defendants to forthwith, instruct all Deposit Money Banks (DMBs) and Financial Institutions to start henceforth, to remit to the plaintiff all Stamp Duties and Electronic Money Transfer Levies ( EMTL) to be collected in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals (whether electronically done or otherwise) within the territory of Anambra State, pursuant to Section 4 (2)of the Stamp Duties Act, 2004, as amended.
The plaintiff also sought the order of the court mandating the defendants, that all the arrears of Stamp Duties and Electronic Money Transfer Levy (EMTL) already remitted to them by Deposit Money Banks and Financial Institutions shall be distributed among the different States of the Federation on the basis of derivation, pursuant to Section 163 (b) of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
In addition, it asked the court for a declaration that the purported directive of the Federal Inland Revenue Service (FIRS), in its Press Release on Clarification of Administration of Stamp Duties in Nigeria with regard to the administration, collection, and/or remittances of Stamp Duties in Nigeria, to License Deposit Money Banks (DMBs) and other Financial Institutions in Nigeria, is unconstitutional, null, void and of no effect whatsoever.
According to it, this is because it seeks to the extent of interfering, has interfered, and would continue to interfere with the powers and authority of the plaintiff as enshrined in Section 4(2) of the Stamp Duties Act, CAP S8, Laws of Federal Republic of Nigeria, 2004, as amended.
It further prayed the court for an order mandating all Deposit Money Banks and Financial Institutions pursuant to Section 24 and 25 of the Stamp Duties Act, 2004, as amended, to submit to it forthwith, the records/evidences of all their remittances of the qualified chargeable duties and Electronic Money Transfer Levy so far collected, to the defendants in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals within the territory of Anambra State under Section 4(2) of the Stamp Duties Act, 2004, as amended.
It also prayed the court for an order or perpetual injunction restraining the defendants, their agents, servants, workers, and howsoever called, from interfering or otherwise continuing to interfere with the right of the plaintiff to collect revenue derivable from stamp duties and Electronic Transfer Levy in respect of instruments or transactions initiated and executed or carried out between persons or individuals within the territory of Anambra State pursuant to Section 4(2) of the Stamp Duties Act, 2004, as amended in any form or disguise again.”
The plaintiff also pleaded with the court to determine whether by the clear provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, Stamp Duties are supposed to be paid, when applicable to the State from which they are derived and NOT for the benefit, inter alia, of the Federal and State Governments and the Local Government Councils in each State on such terms as and in such manner as may be prescribed by the National Assembly pursuant to Section 162 (3) of the Constitution of the Federal Republic of Nigeria, 1999 as amended?
It also required the court to determine whether the Stamp Duties collected by the Federal Government, through the Federal Inland Revenue Service (FIRS) under Section 4(1)of Stamp Duties Act, 2004, as amended, can be paid into the Federation Account as directed by the FIRS, to Deposit Money Banks (MDBs) and Financial Institutions in paragraph 7 of the Press Release dated 20/7/2020?
It also asked the court to determine whether as currently constituted and administered, the said Constitution and the said Stamp Duties Act, did permit the infringement by the Federal Government through FIRS, into the area which, under the precise and well spelt out separation of powers enshrined in Section 4(1) and 4 (2) of the Stamp Duties Act, 2004, as amended, are within the exclusive preserve of the various States of the Federation?
Below is the originating summons and affidavit.
In the Federal High Court of Nigeria in the Awka Judicial Division, holden at Awka.
Suit No. FHC/AWK/CS/03/2022
Between Anambra State Board of Internal Revenue – Plaintiff
and
Attorney-General of the Federation, Minister of Finance, Executive Chairman, Federal Inland Revenue Service
Originating summons brought to order 3 Rule 9 of the Federal High Court, (Civil procedure) rules 2019 and under the inherent jurisdiction of the honourable court as preserved by Section 6(6) of the Constitution of the Federal Republic of Nigeria, 1999 as amended.
Defendants are praying the honourable court for the determination of the following questions:
Whether Section 27 of the Finance Act, 2021, which has amended Section 89A of the Stamp Duties Act and subscribed to the Minister of Finance enlarged powers to regulate, subject to the approval of the National Assembly, the imposition, administration, auditing, accounting, collection and remittance of Stamp Duties on electronic receipts in respect of instruments initiated and executed or transaction initiated and carried out between persons or individuals, which is accruable to the States of the Federation, pursuant to Section 4 (2) of the Stamp Duties Act, 2004, as amended, is in conflict with the provisions of Sections 3(3), 111, 115 and 116(2) of the Stamp Duties Act, 2004, as amended; and inconsistent with the provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999 as amended, and therefore it is null void and of no effect whatsoever, to the extent of the inconsistency?
2. Whether by the clear provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, Stamp Duties are supposed to be paid, when applicable to the State from which they are served and not for the benefit, inter alia, of the Federal and State Governments and the Local Government Councils in each State on such terms as and in such manner as may be prescribed by the National Assembly pursuant to Section 162 (3) of the Constitution of the Federal Republic of Nigeria, 1999 as amended?
(3) Whether the Stamp Duties collected by the Federal Government, through the Federal Inland Revenue Service (FIRS) under Section 4(1)of Stamp Duties Act, 2004, as amended, can be paid into the Federation Account as directed by the FIRS, to Deposit Money Banks (MDBs) and Financial Institutions in paragraph 7 of the Press Release dated 20/7/2020?
4. Whether as currently constituted and administered, the said Constitution and the said Stamp Duties Act, did permit the infringement by the Federal Government through FIRS, into an area which, under the precise and well spelt out separation of powers enshrined in Section 4(1) and 4 (2) of the Stamp Duties Act, 2004, as amended, are within the exclusive preserve of the various states of the Federation?
The plaintiff hereby seeks against the defendants the following reliefs jointly and severally:
1. A declaration that the purported provision of section 27 of the Finance Act, 2021, which had amended Section 89A of the Stamp Duties Act, and subscribed to the Minister of Finance enlarged powers to regulate, subject to the approval of the National Assembly, the imposition, administration, auditing, accounting, collection and remittance of Stamp Duties on electronic receipts in respect of instruments initiated and executed or transaction initiated and carried out between persons or individuals, which is accruable to the States of the Federation, pursuant to Section 4 (2) of the Stamp Duties Act, 2004 as amended, and inconsistent with Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, and therefore it is null and void and of no effect to the extent of the inconsistency.
2. A declaration that upon a proper construction of Section 4 (2) of the Stamp Duties Act, CAP S8, Laws of the Federal Republic of Nigeria 2004, as amended and the Anambra State Stamp Duties (Recovery and Collection) Regulations, 2016 are the extant laws that should govern the collection of Stamp Duties in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals (whether electronically done or otherwise) within the territory of Anambra State and Not the purported Section 27 of the Finance Act 2021and/or the Federal Inland Revenue Service (FIRS) said Press Release on Clarification of Administration of Stamp Duties in Nigeria, dated 20/7/2020.
3. A declaration that upon a proper construction of Section 4(2) of the Stamp Duties Act, CAP S8, Laws of Federal Republic of Nigeria 2004, as amended, the plaintiff is the proper party to collect duties and Electronic Money Transfer Levy or revenue derived from or derivable from duties/levies in respect of instruments initiated and executed or transaction initiated and carried out between persons or individuals (whether electronically done or otherwise) within the territory of Anambra State, at the prevailing rate already fixed by the Federal Government of Nigeria to which the plaintiff accepted and agreed with.
4. An order of the honourable court directing the defendants to forthwith instruct all Deposit Money Banks (DMBs) and Financial Institutions to strat henceforth to remit to the plaintiff all Stamp Duties and ElectronicMoney Transfer Levies ( EMTL) to be collected in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals (whether electronically done or otherwise) within the territory of Anambra State, pursuant to Section 4 (2)of the Stamp Duties Act, 2004, as amended.
5. An order mandating the defendants that all the arrears of Stamp Duties/Levies and Electronic Money Transfers Levy (EMTL) already remitted to them by Deposit Money Banks and Financial Institutions shall be distributed among the States of the Federation on the basis of derivation pursuant to Section 163 (b) pf the Constitution of the Federal Republic of Nigeria, 1999, as amended.
6. A declaration that the purported directive of the Federal Inland Revenue Service (FIRS) in its Press Release on Clarification of Administration of Stamp Duties In Nigeria with regard to the administration, collection and/or remittances of Stamp Duties in Nigeria, to Licenses Deposit Money Banks (DMBs) and other Financial Institutions in Nigeria with regard to administration, collection and/or remittances of Stamp Duties in Nigeria, is unconstitutional, null, void and of no effect whatsoever. This is because it seeks to the extent of interfering, has interfered, and would continue to interfere with the powers and authority of the plaintiff as enshrined in Section 4(2) of the Stamp Duties Act, CAP S8, Laws of Federal Republic of Nigeria 2004, as amended.
7. An order mandating all Deposit Money Banks and Financial Institutions pursuant to Section 24 and 25 of the Stamp Duties Act, 2004, as amended, to submit to the Plaintiff forthwith, the records/evidences of all their remittances of the qualified chargeable duties and Electronic Money Transfer Levy so far collected, to the defendants in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals within the territory of Anambra State under Section 4(2) of the Stamp Duties Act, 2004, as amended.
8. An order of perpetual injunction restraining the defendants, their agents, servants, workers, and howsoever called, from interfering or otherwise continuing to interfere with the right of the plaintiff to collect revenue derivable from stamp duties and Electronic Transfer Levy in respect of instruments or transactions initiated and executed or carried out between persons and individuals within the territory of Anambra State pursuant to Section 4(2) of the Stamp Duties Act, 2004, as amended in any form or disguise again.
The summons was taken by David C. Onyilofor, Esq a legal practitioner of Revenue House, No. 1 Esther Obiakor Avenue, Awka Town, Anambra State for the above applicant.
Plaintiff’s consultant:
Affidavit in support of originating summons
Francis Uzoma Ubani, a consultant with the plaintiff on Stamp Duties on
I am aware that the Federal Republic of Nigeria is a Federation of the Federating States of which Anambra State is one.
I know that Nigeria’s operative constitution, the Constitution of the Federal Republic of Nigeria, 1999, as amended, made provision for different levels of authorities, responsibilities, and powers for each level of Government and how to finance the carrying out of its responsibilities for assigned activities.
I am also aware that various statutory legislations are in place to enable the various tiers of government to carry out their respective duties.
I know that one of such legislation is the Stamp Duties Act, CAP S8, LFN 2004, as amended, which makes provision for the imposition and collection of revenue from stamp duties in respect of instruments made between individuals on one hand and companies on the other hand.
I know that from the provisions of the Stamp Duties Act, 2004, as amended, particularly Section 4 (2) of the said Act, as amended by Section 53 (b) of the Finance Act, 2019, empowers the plaintiff which is the relevant Tax Authority in Anambra State of Nigeria to impose and collect duties on instruments initiated and executed or transactions initiated and carried out between persons or individuals whether electronically done or otherwise by bank tellers or other documents within the territory of Anambra State.
While Section 4 (1) of the Stamp Duties Act, 2004, as amended by section 53 (a) of the Finance Act, 2019, empowers the Federal Government of Nigeria through the Federal Inland Revenue Service (FIRS) to collect duties derivable from instruments initiated and executed or transactions initiated and carried out between a company and an individual. Group or body of individuals i.e. corporate bodies.
I know as a fact that Section 4 (1) and (2) of the Stamp Duties Act, 2004, as amended, clearly states what is collectible between the States of the Federation on one hand and the Federal Government of Nigeria on the other.
I am aware that the Anambra State Government pursuant to the provisions of the Stamp Duties Act, 2004, as amended, made guidelines for the provision of Stamp Duties in Anambra State, when it signed into law and gazetted the Stamp Duties (Recovery and Collection) Regulations, 2016, which is in respect of recovery and collection of duties on qualified dutiable instruments initiated and executed or transactions initiated and carried out between persons or individuals within the territory of Anambra State.
I am aware that the Federal Government of Nigeria recently enacted the Finance Act, 2021, which came into force on January 1, 2022.
I know that the provision of Section 27 of the Finance Act, 2021, is in conflict with Section 3 (3), 111, 115, and 116 (2) of the Stamp Duties Act, 2004, as amended and inconsistent with the provisions of section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
I am aware that the provisions of the said Section 27 of the Finance Act, 2021 are null, void, and of no effect whatsoever, to the extent of its inconsistency within the said Constitution.
I know that the powers purported to have been conferred to the second defendant, the Minister of Finance have already been conferred on the President of the Federal Republic of Nigeria and the Governors of the various States of the Federation under Sections 3 (3), 111, 115and 116 (2) of the Stamp Duties Act, 2004, aa amended.
I know that the distribution of stamp duties and Electronic Money Transfer Levy accruable to the Federal Government pursuant to Section 4 (1)of the Stamp Duties Act, 2004, as amended, is based on derivation from each State of the Federation, pursuant to Section 163 (b) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, while the different States of the Federation should collect stamp duties and Electronic Money Transfer Levy pursuant to Section 4 (2)of the Stamp Duties Act, 2004, as amended; which the net proceeds shall be treated as part of the Consolidated Revenue Fund of each of the various states of the Federation, pursuant to Section 163 (a) of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
I know that the said Section 27 of the Finance Act, 2021 is blatant illegality in tainted legislation and it is very unconstitutional and therefore null, void, and of no effect whatsoever, to that extent.
I know as a fact that the second defendant, the Minister of Finance cannot have such powers, neither does the National Assembly, without a Constitutional amendment.
That the provision of the said Section 27 of the Finance Act, 2021, as currently provided should be voided and expunged in its entirety since it is in conflict with the provisions of Sections 3 (3), 111, 115and 116 (2) of the Stamp Duties Act, 2004, as amended and very inconsistent with Section 163 of the said Constitution.
I know that section 1 (1) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, proclaims its supremacy, and its provisions shall have binding force on all authorities and persons throughout the Federal Republic of Nigeria, including the defendants.
Section 1 (3)of the Constitution of the Federal Republic of Nigeria, 1999, as amended, further provides that if any law is inconsistent with the provisions of this Constitution, the Constitution shall prevail, and the other law shall to the extent of the inconsistency be void and of no effect whatsoever.
It appears that Section 27 of the Finance Act, 2021, is just aimed at targetting stamp duties revenue accruable to the different States of the Federation under Section 4 (2)of the Stamp Duties Act, 2004, as amended, by Section 53 (b) of the Finance Act, 2019, and for that, it is void to the extent that it purports to take over the administration and collection of stamp duties and Electronic Money Transfer Levy under Section 4 (2) of the Stamp Duties Act, 2004, as amended, in total disregard to the separation of powers aa enshrined in Section 4 (1)and (2) of the Stamp Duties Act 2004, as amended and contrary to the provisions of section 163 (a) and (b) of the Constitution of the Federal Republic of Nigeria, 1999 as amended.
But, assuming without conceding that the Federal Inland Revenue Service (FIRS), is the only competent authority to collect the stamp duties and Electronic Money Transfer Levy, paid through the Banks; platform, the duties/levies collected are not by law, to be paid into the Federation Account as clearly stated in Paragraph 7 of the FIRS press release dated 20/7/2020, on ‘Classification on Administration of Stamp Duties in Nigeria,’ contrary to the very clear provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, which provides that the proceeds of such collection of the administration cost, as fixed by the Fiscal Responsibility Act, as amended, and the recent Senate resolution.
I know as a fact that the said FIRS Press Release should only refer to situations where such instruments are initiated and executed or transactions initiated and carried out between corporate bodies or between a corporate body and an individual, group or body of individuals, pursuant to Section 4 (1) of the Stamp Duties Act, 2004, as amended.
I know as a fact that it is not correct as alleged in paragraph 5 (iii) of the said FIRS Press Release that in respect of banking transactions, the FIRS is vested with powers to collect stamp duties on all banking transactions, since stamp duties paid on instruments initiated and executed or transaction, or transactions initiated and carried out between an individual and another individual and paid or deducted from the individual’s account should be accruable to the plaintiff on record, pursuant to Section 4 (2) of the Stamp Duties Act, 2004, as amended, and not to the third defendant, the Federal Inland Revenue Service (FIRS) as presently directed by the third defendant.
It is also not correct as alleged in paragraph 5 (iv) of the said FIRS Press Release that the powers given to the States Government through their respective Revenue Tax Authorisation to administer stamp duties by ensuring the assessments and collection and accounting for stamp duties in respect of instruments initiated and executed or transactions initiated and carried out between persons or individuals are paid into the State Government Revenue Accounts pursuant to Section 163(a) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, does not include qualified chargeable transactions carried out through the banking platform.
I am aware that the said FIRS Press Release which purportedly gave the FIRS vested powers to collect stamp duties on all qualified dutiable instruments or transactions, can only be read and applied in conformity with the provisions of the Stamp Duties Act, 2004, as amended, otherwise, it will be null, void and of no effect whatsoever. This said FIRS Press Release is not an Act of the National Assembly that can annul, amend, alter or add to the provisions of the said Stamp DutiesAct, as amended.
I know that there is nowhere in the Stamp Duties Act, as amended, by the Finance Acts, 2019 and 2021, the third defendant is vested with the powers to collect stamp duties/levies on all transactions carried out through the banking platforms, when transactions between persons or individuals as it related to banking is adequately covered under section 4 (2) of the Stamp Duties Act, 2004, as amended by Section 53 of the Finance Act, 2019.
It is in the interest of justice for the Honourable Court to grant all the reliefs of the plaintiff as contained in the Originating Summons.
That the grant of the plaintiff’s said reliefs will do substantial justice to all the parties in this suit.
I verily believe that in the circumstances, only the Honourable Court can come to the aid of the Plaintiff and declare the said FIRS Press Release unconstitutional, null, void, and of no effect whatsoever by interpreting the relevant provisions of the Stamp Duties Act, 2004, aa amended to the benefit of all concerned.
That from the facts and law surrounding this case, I respectfully urge the Honourable Court to grant the reliefs of the plaintiff as contained in the Originating Summons.
I depose to this affidavit in good faith, conscientiously believing same to be true and in accordance with the Oath’s Act, 2004.